Six Sigma for Corporate Real Estate

Key to improving CRE/Business alignment

CRE groups now commonly include staff whose role it is to partner with the various businesses and their executives across the company.  (The service mentality of becoming a "trusted advisor" is prevalent within companies now as it is in B2B solutions.)  These folks are business partners, client relationship managers, client account managers.

The act of collecting business requirements and translating them to real estate needs is a classic opportunity for a House of Quality (not to mention that "House" has a nice real estate tie).  Business partners would be responsible for the "customer's house", identifying interests and mapping to real estate functions.  In the rough example below, you can start to see how making this link can generate the right "what how" dialog between real estate and the business.   

Streetlamp metrics

Yesterday Tom McCarty and I presented to a group of clients at JLL's annual Leading Edge conference.  Leading Edge is a very cool event where our strategic consulting practice leads and the president of our business (Richard McBlaine) talk about world and business trends impacting corporate real estate.  My presentation with Tom focused on leading practices in developing performance measurement systems, particularly on how to do this in a way that measures the value-add of the CRE offer to the business.

The difference between our approach and what CRE groups commonly measure is that CRE groups typically focus exclusively on descriptive metrics -- square footage, square foot per person, cost per square foot.  There's only a partial connection between these types of metrics and what business executives care about.  We call those "streetlamp metrics" after the story about the guy who looks for his lost keys under the streetlamp because, even though that's not where he dropped them, the light is better there.  These metrics are usually easy to collect but not super helpful to the businesses we're supporting.

In retail business models, for example, CRE should be talking about speed to market, which is directly relevant to and predictive of core business performance.

It was a fun event and lots of good discussion during the presentations.

Next week is Presentation Week

For some reason, next week is a week where we are doing more presenting than normal...Both Tom and I are presenting at Leading Edge, then I'm off to Dallas to present on "Applying Six Sigma to Law Firm Sales and Services" while Tom stays in Chicago to chair the "Six Sigma in Retail" conference.  Gotta go practice!